Just like Apple who transformed the music industry and the ecosystem by ‘appifying’ every possible function, Nutanix wants to create a similar trajectory by converting every possible hardware component into software. Sudheesh Nair, President, Nutanix, speaks with EC’s Abhishek Raval
What is Nutanix’s value proposition?
Apple converted the concept of music and turned it into an app in the form of iPod. The company checked all the boxes in terms of having some basic features i.e the music can be rewind, paused, looped etc. On top of that, Apple did much more. iPod was the first app and then it was turned into a phone. Subsequently, the camera, calculator was turned into an app. There are thousands of apps in the Apple ecosystem. The App store, itunes, icloud – all of them worked together.
To apply the same analogy to Nutanix – The data centre is composed of a variety of hardware like servers, firewalls, storage, load balancers, WAN accelerators and there are a number of vendors who provide each of these devices. Most of these devices have nothing but the Intel servers. Intel owned 96% of the data center hardware CPU.
The difference is in software. We can significantly change the value by commoditizing the hardware as a single piece. We give different profiles to the servers. One day it could be a storage system, then a firewall or a load balancer. We have OEM partnerships with Dell and Lenovo and Cisco. We have also partnered with companies like F5, and Citrix to port their load balancing solutions on the Nutanix software. This is the level of portability that customers are looking for.
What’s your view on Hyper converged Infrastructure (HCI) and the importance of solving the storage problem in the data centre?
Storage is the biggest problem that enterprise customers are facing. There are many issues, but storage is a very complex issue. It’s a universal problem because of two reasons – storage is very critical because due to data quality, the business gets disrupted. Thus the number one priority for storage is reliability. The second reason is performance, as business users want faster data availability.
Since the last four years, we have built an excellent storage platform that can do everything a physical storage can do. Our software app can compete with an IBM, Hitachi, EMC, Netapp and others.
About CI vs HCI, CI solved the problem of customers having to go to different vendors for server, storage and network. Companies like Cisco, EMC and Vmware partnered and founded a new entity to launch the CI portfolio. The advantage for the customer is they had to call for one place for support but the disadvantage – there are still three different products. So, sometimes when the application is slow because of storage, they are still suffering.
Our approach of taking the storage and turn that into a software app inside the server and then using a google like architecture to scale it out truly integrated it. However that’s not the end goal, but the Industry termed it as Hyper Converged. Then the market started thinking HCI is not important, may be just for VDI, virtual desktops etc. But in the last four years we have executed well with a dominant market position.
The reason why i am not excited about HCI – the customers are not looking for a box. Our real competition is with cloud giants like Amazon, Azure. They are not selling boxes but complete solutions. Amazon allows buying and provisioning of IT resources in minutes – by swiping a credit card.
HCI is one midpoint for us. While it is an interesting category but the real target is to provide an enterprise cloud – Amazon like experience inside the data centre. It’s not possible without solving the storage problem in a really well and then, scale out like google.
So how do you solve the scale problem?
Scale is important because of two reasons. One is seasonality. In a holiday season, the number of transactions go up. Another reason could be the requirement to scale up because of acquisitions. In a short span of time, the capacities have to be increased by 4x, 5x. Because of these two reasons, scaling is a real problem.
On the other side of scalability, is cyclo creative destruction, it’s like a hype cycle. Usually it is ten years. Every decade, every piece of technology in the data centre becomes obsolete and it is replaced by an even faster or smart machine. But that was last decade. The cycle now has been crunched to two years. In the context of scaling, if my business model is the old way of doing business – which is, I buy something in capex, then i hold it for three-five or seven years then as a result i am depriving the company of all the innovation that’s happening in those years.
The biggest advantage of our scalability is – byte size consumption. If the customer’s requirement is 10x, we can start at 3x. Very rarely, the vendors suggest to under provision vis-a-vis what the customer has asked for. So, start small. Our architecture allows us to do that because we can mix and match and scale. The system is designed to integrate and scale upgraded versions without any down time. The load balancing happens automatically. The system also enables the IT infrastructure to shrink itself. We call this elasticity.
It’s possible because of our web scale architecture. This is an extremely important component because it allows the CIO not to be in two minds whether they bought the right amount of infrastructure. This is the key underpinning of our architecture of how we do hyper converged.
We have already entered times when departments directly subscribe to cloud services without intimating the CIO – to avoid a long approval chain. What is the experience with respect to your Indian customers?
Today, the budget process has changed. Earlier, the storage guys controlled most of the budget. The servers were cheaper and virtualization was expensive. However, today, most of the applications are delivered as SaaS. For e.g., many Indian customers have subscribed to Office365. Remember, email used to be the domain of the corporate IT, and today IT doesn’t do anything other than writing a cheque every month to Microsoft. The budget however is now with the CFO and the applications.
Another example can be about CRM software like Siebel, which was deployed and managed by IT. Salesforce.com owned it. SaaS changed the budget, so suddenly if 50-60% of software is delivered as a monthly subscription over a data centre owned by someone else, what is IT getting paid ? So the budgets shifted resulting in the change of power equation. Thus during conversations, the application owner is also involved. We ask them about their pain areas. They need more performance, and capacity. The term they use is time to value and speed to market. The CIOs are still involved, but a lot of the decision making power is going to the application owners.That’s the shift we are seeing.
The Nutanix platform automates a string of jobs. Is it by any chance a possibility that after opting for the platform, the CIO will have to cut some jobs ?
One of our sales leaders in Bengaluru, actually lost a deal, where the customer was convinced of the applicability of the platform for his company. However they called our partner and said, they will have to cut a few jobs after going onboard the Nutanix platform.
Which new products are you working on ?
Nutanixs’ initial play was in virtualization. HCI is thought about only as virtualisation. We think otherwise. A lot of applications are still not virtualized in the IT environment of enterprises. We have announced support for non virtualized applications and we recently announced the support for containers too.
What are some of the primary business verticals that Nutanix will target in India ?
In India, We are excited about government and Telecom. Nutanix has seen tremendous success in the IT/ITeS, financial services and manufacturing sectors. So, those are the top three right now and the solution applicability is also there for the mid market. In India, we have about 35 thousand SME mid market customers and some of the early customers have been the smaller customers in the mid market space. We are starting to see traction in government.
Globally, our top two verticals have been financial services and Healthcare. The others are manufacturing, retail and government. The US government is a huge customer of ours. Be it the Army, Navy, Airforce, Department of Defence, FBI etc.
